The latest food price index released at the end of last week shows a small decline of half of one percent on the previous month.

After sharp falls in the earlier part of the year across all the main commodities, this is the second month in a row where falls have been less than one percent, suggesting wholesale prices have stabilised.

The food price index is published by the Food and Agriculture Organisation (FAO), an agency of the United Nations (UN).

The FAO food price index is updated on a monthly basis for meat, dairy, cereals, vegetable oils and sugar and is a barometer for the wholesale value of these commodities.

The fact that the index for October is one point lower than August points to the return of relative stability to global commodity markets following the upward surge in 2022 followed by the sharp decline in 2023.

Meat prices

The meat price index is an amalgamation of prices for beef, sheep, pig and poultry meat.

It averaged 112.9 points in October 2023, which is a 0.7-point fall on the September value and just under four points lower than it was in October last year.

A third monthly fall in the value of pigmeat prices was the drag on the category, as all the other products showed a marginal improvement for October.

Sluggish demand for pigmeat from east Asian countries in particular is offered as the explanation for the pigmeat decline.

On the other hand, global demand for beef, sheep and poultry meat remains strong, even though the major exporters have strong supplies.

Australia’s beef and sheepmeat exports are performing particularly strongly, with October volumes up 39% on October 2022 to 177,665t and the highest volumes since September 2019, according to Meat and Livestock Australia.

US beef exports, on the other hand, are well down on 2022, with year-to-date data showing a 12% decline in volume to 881,343t.

US pork exports increased in the first eight months of 2023 by 11% to 1.9m tonnes compared with the same period last year (US Meat Exporters Federation).

Dairy price index

The dairy price index had recorded the sharpest fall of all commodities over the past year, apart from vegetable oils, but posted a small upturn in October.

The dairy price index had beef at 139.3 points in October 2022, but by September this year had fallen to 108.9 points, but recovered to 111.3 points in October.

Milk powders performed strongly last month, driven by demand from northeast Asia.

Butter has also performed strongly, driven by seasonal winter holiday demand in western Europe, as well as demand from northeast Asia.

Cheese prices were down due to a weaker euro compared to US dollar. Milk supplies have been weaker in western Europe and there is uncertainty in Oceania (Australia and New Zealand) due to El Niño weather conditions.


While cereal prices have been generally stable over the past four months, the index at 125 points is over 27 points below where it was in October 2022.

Wheat prices were down just under 2% in October due to higher than previously anticipated supplies in the US, leading to price competition between exporters.

Coarse grain process improved slightly, up 0.6%, with tighter supplies in Argentina offset somewhat by higher volumes in the US. Sorghum prices increased in October, but barley prices fell, as did rice prices, which were down 2%.

Record production

FAO is forecasting world cereal production for 2023 at 2,819m tonnes, an almost 1% or 26m tonnes increase and a record high.

Wheat production is forecast at 785.1m tonnes, 18.1m or 2% less than 2022, while coarse grains is forecast to increase by 38.8m tonnes to 1,510m tonnes, a 2.7% increase.

FAO is forecasting world cereal utilisation in 2023/24 to reach 2,810m tonnes, a 1% increase on the previous year.

Stocks for the close of the 2024 seasons are forecast at 881m tonnes, a 2.6% increase on the opening stock position, while global trade for 2023/24 is forecast to be 469m tonnes, a 1.6% decline on 2022/23 levels of trade.


For farmers, this index should be treated as a guide for general market trends over a period of time, as opposed to a prediction of what will happen in current trade.

That said, it is positive that the rate of decline has stabilised and shown a small upturn for dairy, which suggests the volatile movement of prices experienced since late 2021 is coming to a close.